Mamata launches Safe Savings Scheme

The West Bengal government would launch a small savings deposit scheme for the marginalized sections of the society from October 5 to counter ponzi-schemes, chief minister Mamata Banerjee announced on Thursday.

Even though the scheme is supposed to combat the menace of chit funds in the state, which have crippled several families since the meltdown of the Saradha Chit fund, the chief minister’s hurried-announcement triggered more questions that it answered.

“It would be termed ‘Safe Savings Scheme’ or ‘3S’ and would become an alternative to the chit funds as the money would be safe here and people wont be cheated. We would be launching it on October 5,” Mamata said at the state secretariat.

The West Bengal Financial Development Corporation would run the scheme through four Nationalized banks – State Bank of India, United Bank of India, UCO Bank and Allahabad bank. Other banks may join later.

“While an individual would be able to deposit any amount ranging between 1000 – five lakhs, a family would be able to deposit upto Rs 5 lakhs,” she said.

The term of deposit would start from one year and would go up to five years. But people would be able to withdraw their money even after three months.

“The rate of interest would be the same as in banks. Citizens would deposit and withdraw their money through banks only,” the chief minister added.

Financial experts such as Ajitava Roychoudhury and Dipankar Dasgupta however raised several questions over the efficacy of the new scheme.

“If people need to deposit their money through banks and the scheme would offer the same rate of interest as that given by banks, why would people go for the scheme? What is the difference?” asked Dasgupta.

State finance minister Amit Mitra failed to come up with any satisfactory answers either. All he could say was: “This is a government scheme and the money would be safe here. There are several villages where there are no banks. We would try to open banks in these areas and facilitate the process so that people can deposit their money.”

The finance minister added that the government would facilitate the people for availing the scheme. The process would be simplified. The scheme would come with a sovereign guarantee.

Dasgupta however questioned: “But are the several schemes that are provided by the nationalized banks, unsafe? If people deposit their money if nationalized banks can they be cheated? I really didn’t understand the difference,”

Experts such as Roychoudhury said: “The West Bengal Financial Development Corporation is a non-banking institution. In that case how will the money be invested and what about the returns? Will the government invest the money in its own projects?”